This summary is a translation of ‘KESSAN TANSHIN’ which is an unaudited report.

Summary of Consolidated Financial Results for FY2015(Year ended March 31, 2016) 〔Japanese GAAP〕
April 21, 2016
Company name:SOGO MEDICAL CO., LTD.

Stock exchange listings:

Tokyo 1st Section

Securities code:

4775

Representative:(Title) President & Representative Director(Name) Kenji Sakamoto

Inquiries:(Title) Director & Senior Executive Managing Officer(Name) Makoto Kuroda

URL: http://www.sogo-medical.co.jp/english/

Tel: +81-92-713-7611
E-mail: ir@sogo-medical.co.jp
Date of general shareholders’ meeting (as planned) : June 22, 2016
Dividend payable date (as planned) : June 23, 2016
Annual securities report filling date (as planned) : June 22, 2016
Supplemental material of annual results is available.
There will be a convening briefing of annual results for institutional investors and analysts.
(Amounts are rounded down.)

１．Consolidated Financial Results (from April 1, 2015 to March 31, 2016)（１）Consolidated operating results
Net sales
FY2015FY2014(% indicates year-on-year change.)
Profit attributable
Ordinary income
to owners of parent

Operating income

Millions of Yen%

Millions of Yen%

Millions of Yen%

Millions of Yen%

120,776
107,945

11.9
4.5

6,087
5,017

21.3
0.1

6,196
5,227

18.5
3.1

2,318
2,774

(16.5)(2.8)

Notes: Comprehensive income

FY2015 ¥2,186million (-23.7%)
FY2014 ¥3,009million (4.6%)

Net income
per share

Net income toshareholders’equity ratio

Diluted net income
per share
Yen

Operating income
to net sales ratio

%

%

%

－
8.3
－
11.0
References: Investment profit (loss) on equity method: ¥－for FY2015 :¥－for FY2014

8.6
7.6

5.0
4.6

FY2015FY2014

Yen

Ordinary income tototal assets ratio

154.65192.20（２）Consolidated financial positions
Total assets
FY2015FY2014

Net assets

Capital adequacy ratio

Net assets per share

Millions of Yen

Millions of Yen%

Yen

74,621
69,81129,646
26,52139.5
37.7

1,967.14
1,824.14

References: Owner’s equity: ¥ 29,442 for FY2015 :¥ 26,336 million for FY2014

（３）Consolidated cash flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and equivalents,
end of period

Millions of Yen

Millions of Yen

Millions of Yen

Millions of Yen

7,004
6,051

(4,981)(5,296)(635)(1,637)

6,356
4,968

FY2015FY2014
２．Dividends

Dividend per shareFirst quarter

Second quarter
Yen

FY2014FY2015FY2016(forecast)Third quarter

Yen

－
－

40.00
22.50
25.00

－
－

Yen

Yen

40.00
22.50
25.00

80.00
45.00
50.00

Ratio of total amount of dividends
to net assets(Consolidated)

Payout ratio(Consolidated)

Total dividend paid

AnnualYear end

Yen

Millions of Yen%%

FY2014577
20.8
2.3
FY2015677
29.1
2.4
FY2016(forecast)20.1
Note: Dated April 1, 2015, Sogo Medical has instituted a 2-for-1 common stock split. The interim dividend and the yearend dividend for FY2015 and FY2016 (estimate base) are therefore stated adjusted for the effects of the stock split.
３．Consolidated forecasts for FY2016 (from April 1, 2016 to March 31, 2017)
Net salesInterim
Full-year

Operating income

Ordinary income(% indicates year-on-year change.)
Profit attributable
Net income
to owners of parent
per share

Millions of Yen%

Millions of Yen%

Millions of Yen%

Millions of Yen%

Yen

59,121
126,507

3.7
4.7

2,261
6,005

2.0
(1.3)

2,254
6,020

(1.2)
(2.8)

1,327
3,730

25.9
60.9

88.59
248.89

４．Others（１）Material changes in subsidiaries during this period(Changes in scope of consolidations resulting from change is subsidiaries): None
（２）Changes in accounting policies and accounting estimates, retrospective restatement① Changes in accounting policies based on revisions of accounting standard: Yes② Changes in accounting policies other than ones based on revisions of accounting standard : None
③ Changes in accounting estimates: None
④ Retrospective restatement: None
（３）Number of issued and outstanding shares (common stock）① Number of issued and outstanding shares
FY2015: 15,340,156sharesat the end of fiscal year (including treasury stock):② Number of treasury stock at the end of fiscal year:
FY2015: 372,775shares③ Average number of shares:
FY2015: 14,990,296shares

FY2014: 15,340,156shares
FY2014: 902,282shares
FY2014 : 14,438,064shares

(Reference）Summary of Non-consolidated Financial Results
１．Non-consolidated Financial Results (from April 1, 2015 to March 31, 2016)（１）Non-consolidated operating Results
Net sales
FY2015FY2014

Operating income(% indicates year-on-year change.)

Ordinary income

Net income

Millions of Yen%

Millions of Yen%

Millions of Yen%

Millions of Yen%

94,07888,350

6.5
2.0

4,692
4,105

14.3
7.8

4,838
4,608

5.0
7.0

1,396
2,908

(52.0)
3.1

Net income per share

Diluted net income
per shareYen

FY2015FY201493.18
201.42

Yen－－

Note: Dated April 1, 2015, Sogo Medical has instituted a 2-for-1 common stock split. Consolidated net income per share has
been calculated assuming that the stock split was instituted at the start of the previous fiscal year.
（２）Non-consolidated financial positions
Total assets
FY2015FY2014

Net assets

Capital adequacy ratio

Net assets per share

Millions of Yen

Millions of Yen%

yen

66,78963,483

26,91024,72440.3
38.9

1,797.91
1,712.48

References: Owner’s equity: ¥ 26,910 million for FY2015 :¥ 24,724 million for FY2014※Expression of implementation status of audit proceduresThis summary is exempt from financial audit, to conform with “The Financial Instruments and Exchange Law” of Japan.
The financial audit has not been completed.
※ Notes for using forecasted information and others
These forecasts are based on currently available information. Actual financial results could differ from the forecast due tovarious factors. Please refer to “1. Operating Results (1) Analysis of Operating Results” on page.5 for assumptions andcautions on the use of these financial forecasts.
Note that dated April 1, 2015, Sogo Medical has instituted a 2-for-1 common stock split.

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2015

Contents
1. Operating Results ..............................................................................................................................2(1) Analysis of Operating Results .....................................................................................................2(2) Analysis of Financial Positions ...................................................................................................6
2. Management Policies ........................................................................................................................9
3. Basic Approach to Selection of Accounting Standards .....................................................................9
4. Summary Information .......................................................................................................................9
5. Consolidated Financial Statements ................................................................................................. 11(1) Consolidated Balance Sheet ...................................................................................................... 11(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income .......13(3) Consolidated Statements of Change in Net Assets ....................................................................15(4) Consolidated Statements of Cash Flows ...................................................................................17(5) Notes to Consolidated Financial Statements .............................................................................19(Note on the Going-Concern Assumption) .............................................................................19(Basic Information of Consolidated Financial Statements) ....................................................19(Consolidated Balance Sheet) ................................................................................................. 22(Consolidated Statements of Income) .....................................................................................23(Consolidated Statements of Cash Flows) ..............................................................................24(Segment Information) ............................................................................................................25(Per Share Information) ..........................................................................................................28(Significant Subsequent Events) .............................................................................................28

1

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2015

1. Operating Results(1) Analysis of Operating Results①Operating Results for FY2015(in millions, except percentages)
FY2014

Sales

Margin¥107,945

Higashinihon

FY2015%¥120,776

MarginChange%Change¥12,83111.9%

39,614

43,838

4,224

10.7

Medical practice support

8,617

7,750

(867)

(10.1)

Pharmacies

30,99736,088

5,091

16.4

28,20533,176

4,970

17.6

Medical practice support

8,420

6,765

(1,655)(19.7)

Pharmacies

19,784

26,410

6,626

33.5

37,79339,9052,111

5.6

Medical practice support

8,040

6,077

(1,963)(24.4)

Pharmacies

29,75233,828

4,075

13.7

2,331

3,855

1,524

65.4

Nishinihon

KyushuOthersOperating Income

5,017

4.6

6,087

5.0

1,069

21.3

Higashinihon

842

2.1

1,228

2.8

386

45.9

Nishinihon

1,510

5.4

2,082

6.3

571

37.8

Kyushu

2,643

7.0

2,854

7.2

210

8.0

Others

620

26.6

490

12.7

(129)

(20.9)

Reconciliation

(599)

-

(568)

-

31

-

Ordinary Income

5,227

4.8

6,196

5.1

969

18.5

Profit attributable to owners of parent

2,774

2.6

2,318

1.9

(456)

(16.5)In April 2014, Sogo Medical launched a three-year medium-term management plan which was
dubbed “Further Challenge —Toward a better society in which people can live with a sense of
security—.” The plan outlines medium-term goals and specific priority initiatives. In the year ending
March 31, 2016, which is the second year of our current medium-term plan, the Sogo Medical Groupis tackling the challenge of solving the problems confronted by society by further expanding andadvancing the initiatives carried out thus far and by developing new services that are needed aroundthe world.

In the fiscal year, Sogo Medical supported the start-up of 304 private practices, including succession
start-ups and health care malls. At the end of the fiscal year, the number of doctors wishing to2

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2015

transfer/start-up a practice via the DtoD System stood at 62,429 doctors, an increase of 5,924 doctors
compared with the end of FY2014.

In the dispensing pharmacies business, there were 47 new openings in the fiscal year, including 25
pharmacies acquired via M&A deals. The total number of pharmacies at the end of the fiscal year is576. In a breakdown of pharmacy openings by region, 17 pharmacies were opened in East Japan, 24
in West Japan, and six in Kyushu. Of the 47 pharmacies opened in the fiscal year, 12 were opened bydoctors using the Sogo Medical practice start-up support system.

In the fiscal year under review, although sales in the medical practice support business decreased
reflecting a decline in sales in the lease and installments division, Sogo Medical posted net sales of¥120,776 million, an increase of 11.9% year-on-year, primarily attributable to an increase in sales atexisting pharmacies and benefits from sales growth owing to the opening of new pharmacies. In the
profit front, the Company booked operating income of ¥6,087 million, a growth of 21.3%, andordinary income of ¥6,196 million, an expansion of 18.5%. However, net income attributable toshareowners of the parent came to ¥2,318 million, a decline of 16.5%, due to negative impact from
impairment losses.

3

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2015

Segment financial results were as follows:

A Higashinihon (East Japan)
Although sales declined in the leasing and installment division, sales rose in the consulting andrental divisions. In addition, we garnered benefit from sales growth reflecting new pharmacy
openings in the pharmacy division. Altogether, we posted net sales of ¥43,838 million, a growth of
10.7% year-on-year. Meanwhile, we recorded operating income of ¥1,228 million, an increase of
45.9% reflecting an increase in gross profit from a rise in sales in the consulting, rental andpharmacy divisions.

B

Nishinihon (West Japan)

Although sales declined in the rental, leasing and installment divisions, sales rose in the consulting
division. In addition, we garnered benefit from sales growth reflecting new pharmacy openings in
the pharmacy division (including sales contribution from subsidiaries in which we acquired equity).
Altogether, we posted net sales of ¥33,176 million, a growth of 17.6% year-on-year. Meanwhile, werecorded operating income of ¥2,082 million, an increase of 37.8% reflecting an increase in grossprofit from a rise in sales in the consulting and pharmacy divisions.

C

KyushuAlthough sales decreased in the rental, leasing and installment divisions, net sales reached ¥39,905
million, a growth of 5.6% year-on-year, due in part to an increase in sales from existing pharmacies
and sales growth benefits from the opening of new pharmacies. Meanwhile, operating income
totaled ¥2,854 million, a rise of 8.0%, owing to an increase in gross profit on the back of a growth insales in the consulting and pharmacy divisions.

4

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2015②Forecasts for FY2016

FY2015FY2016(Forecasts)

Change(amount)

Change(%)

Millions of Yen

Millions of Yen

Millions of Yen%

120,776

126,507

5,730

4.7

Operating income

6,087

6,005

(81)

(1.3)

Ordinary income

6,196

6,020

(175)

(2.8)

Profit attributableto owners of parent

2,318

3,730

1,412

60.9

Net income per share (¥)

154.65248.8994.24-

Net sales

FY2016 is the final year of the current medium-term management plan. The Company plans tocontinue to undertake its priority initiatives of undertaking new businesses, improving anddeepening existing businesses, and expanding corporate value, based on the theme of further
challenge.
In FY2016 (April 1, 2016 to March 31, 2017), the Company forecasts net sales of ¥126,507 million,a rise of 4.7% year-on-year. Sales growth in the medical practice support business is expected tooffset negative impact from a revision to dispensing fees in the pharmacy business.
Meanwhile, the Company estimates operating income of ¥6,005 million, a decline of 1.3%
year-on-year, and ordinary income of ¥6,020 million, a fall of 2.8%, as it does not expect to absorb
an increase in SG&A costs. Note that in FY2016, the Company forecasts net income of ¥3,730
million, an increase of 60.9%, as the impairment losses in the previous fiscal year are expected todisappear.

The forecasts above were created based on information available as of the date these materials werereleased. Actual financial results could possibly differ from these forecasts due to various factors.

5

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2015(2) Analysis of Financial Positions①Analysis of Assets, Liabilities, and Net Assets(in millions except percentages and ratios)
FY2014
Total Assets

FY2015

Change¥69,811¥74,621¥4,810including Cash and Deposits

4,988

6,376

1,387

Liabilities

43,29044,975

1,685

including Interest-Bearing Debt *1

16,572

18,447

1,874

Net Assets

26,52129,646

3,124

Shareholders' Equity Ratio (%)

37.7

39.5

1.7

Net Debt-to-Equity Ratio (times) *2

0.44

0.41

(0.03)*1.Interest-Bearing Debts include lease obligations and accounts payable-installment purchases.
*2. Net Debt-to-Equity Ratio=( Interest-Bearing Debts－Cash and Deposits) / Shareholders' Equity

Total assets at the end of the fiscal year stood at ¥74,621 million, an increase of ¥4,810 million
versus the end of FY2014. Current assets totaled ¥39,189 million, an increase of ¥2,605 million
year-on-year. This reflects an increase in notes and accounts receivable-trade of ¥2,131 million.
Meanwhile, noncurrent assets totaled ¥35,431, an increase of ¥2,205 million. This reflects anincrease in buildings and structures of ¥2,953 million and decrease in property for lease of ¥752
million.

As of March 31, 2016, our total liabilities stood at ¥44,975 million, an increase of ¥1,685 million
versus the same time a year earlier. Current liabilities were ¥31,237 million an increase of ¥1,128
million. This reflects an increase in current portion of long-term loans payable of ¥1,143 million.
Noncurrent liabilities totaled ¥13,737 an increase of ¥557 million. This was primarily attributable toan increase in long-term loans payable of ¥2,368 million, although long-term accounts
payable-installment purchases declined ¥1,117 million. It should be noted that interest-bearing debt(including lease obligations and accounts payable-installment purchases) increased ¥1,874 million to¥18,447 million. Consequently, the net debt-to-equity ratio (interest-bearing debt less cash anddeposits divided by shareholders’ equity) was 0.41, compared to 0.03 as of the previous fiscal
year-end.

Net assets at the end of the fiscal year under review stood at ¥29,646 million, an increase of ¥3,124
million compared with the end of the previous fiscal year. This reflects a decline of ¥708 million due
to the repurchase of shares, and a decrease of ¥629 million owing to dividend payments. Meanwhile,
6

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2015

there was an increase of ¥2,262 million due to the retirement of treasury stock in tandem with astock swap, and an increase of ¥2,318 million, reflecting the posting of net income attributable to theshareowners of the parent. Extrapolating from this, the equity ratio was 39.5% at the end of the fiscal
year, owing to a 1.7percentage point increase from 37.7% at the end of FY2014.

②Cash Flows

Cash and cash equivalents ("funds") at the end of the fiscal year under review totaled ¥6,356 million,
which was ¥1,387 million (27.9%) more than at the end of the previous fiscal year. This was due tothe following main factors.

(Cash Flows from Operating Activities)
Net cash provided by operating activities in the fiscal year under review was ¥7,004 million. Main
factors were ¥4,824 in income before income taxes and minority interest, ¥3,836 million in
depreciation charges, ¥1,253 million decrease in deferred tax assets, ¥2,559 million in expenditure
for income tax payments and ¥1,436 increase in accounts payable-trade.

(Cash Flows from Investing Activities)
Net cash used in investing activities in the fiscal year under review was ¥4,981 million. Main factors
were ¥4,233 million in expenditure for the acquisition of assets for use by Sogo Medical, and ¥876
million in purchase of property for lease.

(Cash Flows from Financing Activities)
Net cash used in financing activities was ¥635 million. Main factors were ¥6,485 million in income
from long-term loans, ¥3,001 million in expenditure for the redemption of long-term loans, ¥2,092
million in expenditure for the settlement of installment obligations, ¥751 million in expenditure forthe settlement of lease obligations, ¥708 million in purchase of treasury stock, and ¥629 million in
expenditure for dividend payments.

7

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2015(Reference) Cash flow-Related Indicators
FY2011FY2012FY2013

FY2014FY2015

36.7

37.8

35.7

37.7

39.5

40.5

41.9

44.6

69.8

76.6

Interest-bearing debt to cash flows (%)

3.3

2.0

2.1

2.8

2.6

Interest coverage ratio (times)

34.2

49.1

57.1

45.8

62.7

Capital adequacy ratio (%)
Capital adequacy ratio(based on fair value) (%)

Capital adequacy ratio: Shareholders’ equity / Total assets
Capital adequacy ratio (based on fair value): Market capitalization / Total assets
Interest-bearing debt to cash flows: Interest-bearing debt / Cash flows
Interest coverage ratio: Cash flows / Interest paid
(Notes)1. Each ratio is calculated using consolidated amounts.
2. Market capitalization is calculated using outstanding shares less treasury stock.
3. Cash flows and interest paid are clarified as net cash provided by (used in) operating
activities.
4. Interest-bearing debt is all debt for which interest is paid interest.

8

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2015

2. Management Policies(1) Medium-Term Management Plan “Further Challenge”(2) Long-Term Vision and Medium-Term Management Plan
(3) Priority Initiatives

Disclosure has been omitted due to the absence of material change in the information disclosed in
the Summary of Financial Statements for the Fiscal Year to March 2014 (released on April 17,2014).

The above-mentioned Summary of Financial Statements is available for viewing at the following
URL.
(Corporate website of Sogo Medical)
http://www.sogo-medical.co.jp/english/

3. Basic Approach to Selection of Accounting Standards
Since the business activities of Sogo Medical Group are currently confined to Japan, consolidated
financial statements are prepared according to Japanese accounting standards. However, Sogo
Medical will consider the implementation of International Financial Reporting Standards (IFRS)
taking into account a rising foreign shareholder percentage in the future as well as circumstances inJapan and internationally.

4. Summary Information
Changes in accounting policies and accounting estimates, retrospective restatement (Changes inaccounting policies)
From 1Q FY2015, Sogo Medical began applying the Accounting Standard for Business
Combinations (ASBJ Statement No.21, September 13, 2013), Accounting Standard forConsolidated Financial Statements (ASBJ Statement No.22, September 13, 2013), and the
Accounting Standard for Business Divestitures (ASBJ Statement No.7, September 13, 2013).
Accordingly, the Company has changed its booking method and will now post acquisition-related
expenses in the consolidated fiscal year in which they are incurred. In addition, the disclosureterminology (change in reporting method) has been changed for quarterly net income and minority
interest has been changed to non-controlling interest.
Consequently, the consolidated financial statements for FY2014 have been restated to reflect this9

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2015

change in reporting method.

In the consolidated statements of cash flows for the fiscal year under review, cash flows for
expenses related to the acquisition of equity in subsidiaries which entailed a change in the scopeof consolidation were classified as net cash used in operating activities.
Sogo Medical, as of the start of 1Q FY2015, has adopted the Accounting Standard for Business
Combinations in accordance with the transitional treatment set forth in Paragraph 58-2 (4) of
Accounting Standard for Business Combinations, Paragraph 44-5 (4) of Accounting Standard forConsolidated Financial Statements, and Paragraph 57-4 (4) of Accounting Standard for Business
Divestitures.
In light of this, the negative impact to operating income, ordinary income, and income before
income taxes was ¥53 million, respectively, in FY2015.

10

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2015

5. Consolidated Financial Statements(1) Consolidated Balance Sheet(in millions)
FY2014FY2015( As of March.31, 2015)( As of March.31, 2016)

AssetsCurrent assets
Cash and deposits¥ 4,988¥ 6,376

Notes and accounts receivable-trade

17,485

19,617

Accounts receivable-installment sales

1,806

1,874

Lease receivables and investment assets

1,701

Inventories*1

Deferred tax assets

7,543

1,403
*1

6,583

628

789

Other

2,450

2,566

Allowance for doubtful accounts

(19)

(20)

Total current assets

36,584

39,189Property for lease, net

5,929

5,177

Buildings and structures, net

8,763

11,716

Land

3,992

4,109

Other, net

3,116

2,539

Noncurrent assets
Property, plant and equipment

Total property, plant and equipment*2

21,801*2

23,542Intangible assets
Goodwill

5,252

5,833

Other

1,031

1,201

Total intangible assets

6,283

7,034

Investment securities

1,566

1,134

Deferred tax assets

468

507

Investments and other assets

3,107

3,231

Allowance for doubtful accounts

Other

(0)

(19)

Total investments and other assets

5,141

4,853

Total noncurrent assets

33,22635,431

Total assets

69,811

74,621

11

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2015(in millions)
FY2014FY2015( As of March.31, 2015)( As of March.31, 2016)

Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of long-term loans¥ 18,841¥ 18,590

360

610

2,903

4,046

Lease obligations

363

267

Accrued expenses

2,072

2,972

Income taxes payable

1,452

1,572

190

182

Other

Deferred profit on installment sales

3,925

2,994

Total current liabilities

30,10931,237Long-term loans payable

6,835

9,204

Lease obligations
Long-term
accounts payable-installment purchase

1,028

714

3,055

1,938

2,260

1,880

Noncurrent liabilities

Other
Total noncurrent liabilities

13,18013,73743,29044,975

Capital stock

3,513

3,513

Capital surplus

4,136

5,566

Retained earnings

19,25520,944

Treasury stock(1,044)(920)

Total shareholders' equity

25,861

29,104475

338

Total accumulated other

475

338

Minority interests

184

203

Total net assets

26,52129,646

Total liabilities and net assets

69,811

74,621

Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive
Valuation difference on
available-for-sale securities

12

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2015(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)(in millions)
FY2014FY2015( to March.31, 2015)( to March.31, 2016)

Net sales¥ 107,945¥ 120,776

Cost of sales

93,139103,178

Gross profit

14,805

17,598Selling, general and administrative expenses*1

Operating income

9,787

*1

11,511

5,017

6,087

Dividends income

20

22

Rent income

38

31

Dividends income of life insurance

106

36

Other

202

196

Total non-operating income

368

287

Interest expenses

75

75

Loss on valuation of investment securities

17

-

Other

65

103

Total non-operating expenses

159

178

5,227

6,196

Non-operating income

Non-operating expenses

Ordinary income
Extraordinary loss
Impairment loss
Loss on sales of shares of subsidiaries andassociates

*2

51

*2

1,014

-

87

Loss on valuation of investment securities-

270

Total extraordinary loss

51

1,371

Income before income taxes

5,175

4,824

Income taxes-current

2,236

2,569

Income taxes-deferred

163

(68)

Total income taxes

2,400

2,501

Net income

2,774

2,323

Profit (loss) attributable to non-controllinginterests

0

4Profit (loss) attributable to owners of parent

2,774

2,318

13

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2015(Consolidated Statements of Comprehensive Income)(in millions)
FY2014FY2015( to March.31, 2015)( to March.31, 2016)

Net income¥ 2,774¥ 2,323

234

(136)

234

(136)

Comprehensive income

3,009

2,186

Comprehensive income attributable toComprehensive income attributable toowners of the parent

3,009

2,181

Comprehensive income attributable tonon-controlling interests

04

Other comprehensive income
Valuation difference on
available-for-sale securities
Total other comprehensive income

14

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2015(3) Consolidated Statements of Change in Net Assets(in millions)

FY2014（from April 1, 2014 to March 31,2015）
Shareholders' equity
Capital stock
Balance at the
beginning ofcurrent period

Capital surplus

3,513

Retained earnings

4,136

Treasury stock

17,058(1,043)

Total shareholders'equity23,665

Changes of
items during the period
Dividends from surplus

(577)

(577)

Profit attributable toowners of parent

2,774

2,774

Purchase oftreasury stock

(1)

(1)

Disposal oftreasury stock
Net changes of items
other thanshareholders' equity
Total changes of items
during the period

-

-

2,197

(1)

2,196

Balance at theend of current period

3,513

4,136

19,255(1,044)25,861

Accumulated othercomprehensive income
Valuation difference on
available-for-sale securities
Balance at the
beginning ofcurrent period

Non controlling
Interest

240

28

Net assets

23,934

Changes of
items during the period
Dividends from surplus(577)

Profit attributable toowners of parent

2,774

Purchase oftreasury stock(1)

Disposal oftreasury stock
Net changes of items
other thanshareholders' equity

234

156

390

Total changes of items
during the period

234

156

2,587

Balance at theend of current period

475

184

26,521

15

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2015

FY2015（from April 1, 2015 to March 31,2016）(in millions)Shareholders' equity

Capital stock
Balance at the
beginning ofcurrent period

Capital surplus

3,513

Retained earnings

4,136

Treasury stock

19,255(1,044)

Total shareholders'equity25,861

Changes of
items during the period
Dividends from surplus

(629)

(629)

Profit attributable toowners of parent

2,318

2,318

Purchase oftreasury stock
Disposal oftreasury stock

1,429

(708)

(708)

832

2,262

Net changes of items
other thanshareholders' equity
Total changes of items
during the period

-

1,429

1,688

124

3,242

Balance at theend of current period

3,513

5,566

20,944(920)

29,104

Accumulated othercomprehensive income
Valuation difference on
available-for-sale securities
Balance at the
beginning ofcurrent period

Non controlling
Interest

475

184

Net assets

26,521

Changes of
items during the period
Dividends from surplus(629)

Profit attributable toowners of parent

2,318

Purchase oftreasury stock(708)

Disposal oftreasury stock

2,262

Net changes of items
other thanshareholders' equity

(136)

18

(117)

Total changes of items
during the period

(136)

18

3,124

Balance at theend of current period

338

203

29,646

16

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2015(4) Consolidated Statements of Cash Flows(in millions)
FY2014FY2015( to March.31, 2015)( to March.31, 2016)

Net cash provided by (used in) operating activities
Income before income taxes¥5,175¥4,824

Depreciation and amortization

3,746

3,836

Amortization of goodwill

805

1,021

Impairment loss

51

1,014

Loss (gain) on sales of shares of subsidiaries andassociates-

87

Loss (gain) on valuation of investment securities-

270

Interest and dividends income

(22)

(23)

Capital cost and interest expenses

131

112

Decrease (increase) in notes andaccounts receivable-trade

1,050

(993)

Decrease (increase) in
accounts receivable-installment

(104)

(75)

Net decrease (increase) inlease receivables and investment assets

313

298

(953)

1,253

(1,735)(1,436)

(223)

(798)

Other

33

262

Subtotal

8,269

9,652

22

23

(131)

(111)

Income taxes paid

(2,108)(2,559)Net cash provided by (used in) operating activities

6,051

7,004

(3,767)(4,233)

Decrease (increase) in inventories
Increase (decrease) in notes andaccounts payable-trade
Increase/decrease/ in other assets/liabilities

Interest and dividends income received
Interest expenses paid

Net cash provided by (used in) investing activities
Purchase of own-used assets
Proceeds from sales of own-used assets-

172

Purchase of property for lease

(359)

(876)

Purchase of investment securities

(270)

(11)

Purchase of investments in subsidiaries
resulting in change in scope of consolidation

(579)

(147)

Other

(318)

115

(5,296)(4,981)

Net cash provided by (used in) investing activities

17

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2015(in millions)
FY2014FY2015( to March.31, 2015)( to March.31, 2016)

Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans

¥9

¥ 64

Proceeds from long-term loans payable

4,749

6,485

Repayment of long-term loans payable(3,211)(3,001)

(512)

(751)

(2,094)(2,092)

(577)

(629)

(1)

(708)

(1,637)(635)

Net increase (decrease) in cash and cash equivalents

(882)

1,387

Cash and cash equivalents at beginning of period

5,851

4,968

Repayments of lease obligations
Repayments of installment payables
Cash dividends paid
Purchase of treasury stock
Net cash provided by (used in) financing activities

Cash and cash equivalents at end of period

*1

18

4,968

*1

6,356

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2015(5) Notes to Consolidated Financial Statements(Note on the Going-Concern Assumption)
None.

(Basic Information of Consolidated Financial Statements)
1. Scope of Consolidation

Number of Consolidated Subsidiaries: 18 Companies
・Somtech Co., Ltd.
・Sogo Medipro Co.,Ltd.
・Sogo Real Estate Co., Ltd.
・SME Co., Ltd.
・Sogo Medical Pharmacy Chubu Co., Ltd.
・Aoba Pharmacy Co., Ltd.
・Maeda & Co., Ltd.
・Yataya Pharmacy Co., Ltd.
・Taikodo yakkyoku honten Co., Ltd.
・Beauty Drug Saito Co., Ltd.
・Nakano Pharmacy Co., Ltd.
・Phrma systems Co., Ltd.
・Shokando Co., Ltd.
・Dradok Co., Ltd.
・Sogo Care Network Co., Ltd.
・Sun Villa Co., Ltd.
・Hokendohjinsha Inc.
・GM Co., Ltd.

From FY2015, Pharma Systems Co., Ltd. (100% of total shares outstanding acquired on May 20,2015), Shokando Co., Ltd. (100% of total shares outstanding acquired on June 15, 2015), Dradok
Co., Ltd. (100% of total shares outstanding acquired on July 27, 2015), and GM Co., Ltd. (75% of
total shares outstanding acquired on February 10, 2016) were included into the scope of
consolidation.
Meanwhile, from FY2015, Sogo Media Supply Co., Ltd. (sold on August 10, 2015), Matsumura Co.,
Ltd. (absorbed into Sogo Medical via a merger on October 1, 2015), Akatsuki Pharmacy Co., Ltd.
(absorbed into Sogo Medical via a merger on October 1, 2015), and Care Medical Co., Ltd.

19

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2015(absorbed into Sogo Medical via a merger on January 1, 2016) were removed from the scope of
consolidation.

2. Equity-Method
None

3. Fiscal Periods of Consolidated Subsidiaries

Consolidated subsidiaries with fiscal-year ends different from that of the Company:

Nakano Pharmacy Co., Ltd.

May 31

Phrma systems Co., Ltd.

June 30

Taikodo yakkyoku honten Co., Ltd.

July 31

Dradok Co., Ltd.

July 31

GM Co., Ltd.

July 31

Beauty Drug Saito Co., Ltd.

September 30

Yataya Pharmacy Co., Ltd.

October 31

When preparing consolidated financial statements, financial statements as of March 31, 2015, areused for these companies.

4. Significant Financial Accounting Principles(1) Valuation basis and method of major assets①Investment Securities
With market value:
By the mark-to-market method based on average market value over a period of one month prior
to the date of settlement of the consolidated accounts (valuation differences are reported as aseparate component of net assets and the sale price is determined by the moving-averagemethod).
Without market value:
At cost, using the moving-average method
Investments in a limited investment partnership or a similar partnership (that can be considered
as marketable securities in accordance with the Article 2 (2) of the Financial Instruments andExchange Act) are stated at their net equity value on the most recent financial statements that areavailable on the settlement report day as specified in the partnership agreement.

20

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2015②Inventories
Inventories are mainly reported using the lower of cost or market price. The costs are calculatedusing the gross average method.

(2)Depreciation①Property for lease
Depreciation is calculated by use of the straight-line method over each rental term of the assets.
②Plant, Property and Equipment and Intangible assets (Excluding rental assets, leasd assets (lessee)and plant property and equipment related to pharmacies opened after April 1, 2012)
Depreciation for plant, property and equipment is calculated by use of the declining balancemethod. Depreciation for intangible assets is calculated by use of the straight-line method.
Useful lives of building and structures range from 10 to 47 years.
③Leased Assets (Lessee)
Leased assets are classified as property, plant and equipment and intangible assets. Depreciation is
calculated by use of the straight-line method over each asset’s lease term of the assets and with noestimated salvage value.
④Plant property and equipment related to pharmacies opened after April 1, 2012
Depreciation is calculated by use of the straight-line method.

(3)Allowance
Allowance for Doubtful Accounts
Allowances are recognized for doubtful accounts. General provisions are determined on the basisof past credit loss experience, and specific provisions, such as loss apprehensive credits, aredetermined by considering individual collectability.

(4)Revenue and Expense Recognition①Financing Leases (Lessor)
When the Company receives a lease payment, the Company recognizes the sale amount and costof sale.
②Installment Sales
When the Company delivers a product through an installment contract, the Company recognizes
the full contract amount as accounts receivable-installment sales. When a due date arrives, theCompany reports both the installment sale and the installment cost. Additionally, the Company
recognizes an unrealized income corresponding to accounts receivable-installment sales for which
the due date has not arrived at year end as deferred profit on installment sales.

21

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2015(5)Amortization of Goodwill Method and Period
Goodwill is amortized using the straight-line method over a period of no more than 20 years, withthe reasonable period being decided for individual items.

(6) Scope of Funds Used to Prepare Consolidated Cash Flow Statements
Funds used to prepare the consolidated cash flow statements (cash and cash equivalents) include
cash on hand, deposits withdrawable at immediate notice, and easily convertible short-term
investments redeemable within 3 months of acquisition with minimal risk of fluctuations in value.

(7) Others
Consumption and Local Consumption Tax
The Company applies the tax exclusion method for consumption and local consumption tax. The
consumption tax amount not subject to tax credit related to property, plant and equipment isclassified as an investment and other assets. The other assets are depreciated using thestraight-line method over five years. The other consumption tax amount not subject to tax credit isclassified as a period expense.

(Consolidated Balance Sheet)*1. Inventories(in millions)
FY2014
Medical supplies

FY2015¥ 7,220¥ 6,279

Merchandise

119

140

Costs on uncompleted construction contracts

37

13

Raw materials and supplies

167

150

*2. Accumulated Depreciation(in millions)
FY2014
Accumulated depreciation¥ 18,103

22

FY2015¥ 20,258

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2015

3. Contingent Liabilities(in millions)
FY2014Kaze-No-Suzuran-Kai, etc (7 people)

FY2015¥ 2,245

Kaze-No-Suzuran-Kai, etc (7 people)¥ 2,111(Consolidated Statements of Income)*1. Main Selling General and Administrative Expenses(in millions)
FY2014FY2015

Salaries and allowances¥ 3,237¥ 3,774

Depreciation and amortization¥ 1,189¥ 1,454*2. Impairment Losses
FY2014（from April 1, 2014 to March 31,2015）
For internal management, the Sogo Medical Group conducts asset grouping based on theminimum unit generating cash flows. In the pharmacy business, groupings are conducted for each
pharmacy and for leased assets, for each facility.
We reported impairment loss for following groups:
Business

Place

Higashinihon

2 Pharmacy (Kanto)

Nishinihon

1 Property for lease (Kinki)

AmountUse

Classification

Pharmacies

Buildings and structures, etc
Buildings and structures¥4

Buildings and structures, etc

26

Total

51

Property for(in millions)
20

lease
Kyushu5 Pharmacy (Kyushu)

Pharmacies

The book value has been reduced to a recoverable amount for the following assets: pharmacies
posting losses due to business activities and which do not forecast profit going forward, pharmacies
that are scheduled to be relocated, and leased assets scheduled to be sold. The amount of the
reduction is being posted as an impairment loss (¥51 million) under extraordinary losses. This ¥51
million was posted to buildings and structures.
Note that the recoverable amount for assets related to pharmacies is determined based on the net
selling price which reflects the significance of the asset and roadside land prices, tax assessments of
noncurrent assets, and other items. In addition, the recoverable amount for assets related to leased
assets that are scheduled to be sold is determined based on the net selling price which factors in the
expected sale price and other factors.

23

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2015

FY2014（from April 1, 2014 to March 31,2015）
For internal management, the Sogo Medical Group conducts asset grouping based on theminimum unit generating cash flows. In the pharmacy business, groupings are conducted for each
pharmacy and for leased assets, for each facility.
In addition, a portion of goodwill at group companies is grouped based on units used for internalmanagement monitoring.
We reported impairment loss for following groups:
Business
HigashinihonPlace
8 Pharmacy (4 MinamiKanto,

Use

AmountClassification(in millions)Pharmacies

Buildings and structures, etc¥ 135

Goodwill
Buildings and structures
Buildings and structures, etc

868

Total

1,014

4 Tokai)
Nishinihon
Kyushu3Subsidiaries and associates－

1 Pharmacy (Kinki)

Pharmacies

2 Pharmacy (1 Kitakyushu, 1

Pharmacies

09Nannbukyushu)

The book value has been reduced to a recoverable amount for the following assets: pharmacies
posting losses due to business activities and which do not forecast profit going forward, andpharmacies that are scheduled to be relocated. The amount of reduction, ¥145 million, is being
posted as an impairment loss under extraordinary losses. This amount was broken down and posted
as follows: ¥58 million under buildings and structures, ¥82 million under land, and ¥4 million underother. Note that the recoverable amount for assets related to pharmacies is determined based on the
net selling price which reflects the significance of the asset and roadside land prices, tax assessmentsof noncurrent assets, and other items.
In addition, given that earnings at affiliates trended below initial business plans at the time of stockacquisition, business plans for earnings going forward were revised. In accordance with this, therecoverable amount was calculated by employing a 4.2% discount to future cash flows. The ¥868
million in unamortized portion of goodwill, which exceeded the recoverable amount, was posted as
an impairment loss.

(Consolidated Statements of Cash Flows)*1. Items of Cash and Cash Equivalents(in millions)
FY2014
Cash and deposits

FY2015¥ 4,988¥ 6,376

Over three-month time deposit

(20)

(20)

Cash and Cash Equivalents

4,968

6,356

24

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2015

2. Significant Non-Cash Transactions
FY2013 (from April 1, 2013 to March 31, 2014)
Assets and liabilities as a result of this fiscal year’s financing lease transactions were ¥433 million,and ¥463 million respectively. Assets and liabilities as a result of this fiscal year’s installment
sales transactions were ¥715 million, and ¥767 million respectively.

FY2014 (from April 1, 2014 to March 31, 2015)
Assets and liabilities as a result of this fiscal year’s financing lease transactions were ¥313 million,and ¥347 million respectively. Assets and liabilities as a result of this fiscal year’s installment
sales transactions were ¥570 million, and ¥633 million respectively.

(Segment Information)
1. Outline of Segment
Reportable segment are components of the Company for which separate financial information isavailable. The board of directors regularly evaluates these segments to make decisions about how
to allocate resources and assess performance.
Our businesses consist of management consulting for medical institutions and medical doctors,
DtoD (support system for medical practice succession, medical cooperatives, and practitioner
recruitment), TV rental for patients in hospitals, leasing and installment payment sales of medical
equipment, design and construction of medical institutions, pharmacies, managing fee-based
residential homes for the elderly.

Our reportable segments are now ‘Higashinihon’, ‘Nishinihon’ and ‘Kyushu’ to allow for
development of regional strategies and rapid decision-making about business operations.

2. Accounting Method for Segment Sales, Profit (Loss), and Assets
The accounting method for reportable segments was almost the same as the ‘Basic Information ofConsolidated Financial Statements’.
Each segment profit (loss) is calculated based on operating income.
Intersegment sales and transfer pricing are calculated by market prices.

25

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2015

3. Segment Sales, Profit (Loss), and Assets
FY2014 (from April 1, 2014 to March 31, 2015)(in millions)
Reportable Segments

OthersReconciliations

consolidated

Total
*1

*2

amounts*3

Higashinihon

Nishinihon

KyushuTotal

Unaffiliated sales¥ 39,614¥ 28,205¥ 37,793¥ 105,613¥ 2,331¥107,945－¥ 107,945

Intersegment sales

55

738

2

796

4,823

5,620

¥ (5,620)－

107,945

Sales

Total

39,67028,94337,796

106,410

7,155

113,565(5,620)

Segment profit

842

1,510

2,643

4,996

620

5,617

(599)

5,017

Segment assets

25,02915,854

15,27256,156

5,698

61,855

7,955

69,811

1,154

998

957

3,111

294

3,406

340

3,746

578

206

20

805

0

805

－

805

Impairment loss

4

20

26

51

－

51

－

51

Increase in assets

2,679

1,617

991

5,289

118

5,407

194

5,601

OthersDepreciation
Amortization of goodwill*1. Others include items such as wholesales of pharmaceuticals and TV rental for hotels, which are
not classified as reportable segments.
*2. Reconciliations were as follows:(1) Reconciliation for reportable segment loss (¥599million) included elimination of intersegment
sales (¥26million) and overall corporate expense (¥572million). The overall corporate expense
was classified as selling general and administrative expenses and was not allocated to reportablesegments.
(2) Reconciliation for reportable segment assets (¥7,955 million) included elimination investment
against equity (¥-8,464 million) and overall corporate assets (¥17,150 million). The overall assets
were classified as parent company’s deposits and were not allocated to reportable segments.
(3) Assets included property, plant and equipment and intangible assets. Reconciliation of increase of
those assets (¥194 million) was classified as head office’s networking systems and allocation ofother reportable segments.
*3. Reportable segment profits were reconsolidated with the operating income of the consolidated
income statement.

26

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2015

FY2015 (from April 1, 2015 to March 31, 2016)(in millions)
Reportable Segments

OthersReconciliations

consolidated

Total
*1

*2

amounts*3

Higashinihon

Nishinihon

KyushuTotal

Unaffiliated sales¥ 43,838¥ 33,176¥ 39,905¥ 116,920¥ 3,855¥120,776－¥ 120,776

Intersegment sales

40

560

0

601

6,020

6,622

¥ (6,622)

－

Sales

Total

43,87933,73739,906

117,522

9,875

127,398(6,622)

120,776

Segment profit

1,228

2,082

2,854

6,165

490

6,655

(568)

6,087

Segment assets

25,82318,720

16,63561,1804,745

65,926

8,695

74,621

1,314

1,043

919

3,277

194

3,471

364

3,836

OthersDepreciation

678

321

20

1,020

0

1,021

－

1,021

Impairment loss

1,004

0

9

1,014

－

1,014

－

1,014

Increase in assets

4,989

2,764

1,136

8,890

103

8,994

484

9,479

Amortization of goodwill*1. Others include items such as wholesales of pharmaceuticals and healthcare information service,
which are not classified as reportable segments.
*2. Reconciliations were as follows:(1) Reconciliation for reportable segment loss (¥568million) included elimination of intersegment
sales (¥1million) and overall corporate expense (¥570million). The overall corporate expense
was classified as selling general and administrative expenses and was not allocated toreportable segments.
(2) Reconciliation for reportable segment assets (¥8,695 million) included elimination investment
against equity (¥-9,562 million) and overall corporate assets (¥18,902 million). The overall
assets were classified as parent company’s deposits and were not allocated to reportablesegments.
(3) Assets included property, plant and equipment and intangible assets. Reconciliation of increaseof those assets (¥484 million) was classified as head office’s networking systems and allocationof other reportable segments.
*3. Reportable segment profits were reconsolidated with the operating income of the consolidated
income statement.

27

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2015(Per Share Information)
FY2014FY2015

Net assets per share¥ 1,824.14¥ 1,967.14

Net income per share

192.20154.65

Notes:
1. We calculate net assets per share according to the following financial information:(in millions)
FY2014FY2015

Net assets¥ 26,521¥ 29,646

Deduction

184

203

(Non-controlling interests)

184

203

Net assets attributable to common stocks

26,33629,442

Number of common stocks at end of FY

14,437

14,967

2. We did not issue dilutive potential common shares.
Therefore we did not report diluted earnings per share information.

3. We calculate net income per share according to the following financial information：(in millions)
FY2014
Profit attributable to owners of parent(Preferred dividends)
Profit attributable to owners of parent
attributable to common stocks
Average number of common stocks(Significant Subsequent Events)
None.

28

FY2015¥ 2,774¥ 2,318

-

-

2,774

2,318

14,43814,990